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Full bench hearing on RAF and medical negligence trusts

Following on the FISA Focus Weekly report of 9 September 2021 that FISA will apply to be admitted as amicus curiae (friend of the court) in the full bench hearing of the matter in which the Chief Master submitted a report under section 96(2) of the Administration of Estates Act, 66 of 1965, to the court, we can report today that the hearing was held online on 2 and 3 November 2021 before judges Keightley, Millar and Vallaro.

FISA was admitted as amicus curiae and was represented by adv Hannes Lerm, under instructions from Gascoigne Randon and Associates.

The report by the Master, and argument on behalf of the Master by adv Vincent Maleka SC, advanced the view that the appointment of a curator bonis should be the default option in all cases where the plaintiff in a medical negligence or Road Accident Fund claim has reduced legal capacity and that the use of a trust is not authorised under existing legislation. This argument was severely criticised by almost all other parties, including several amici curiae.

Counsel for FISA advanced three further important points:

  • That trustees are required to act jointly and that there is no room in our law for different “classes” of trustee to accommodate a family member of the plaintiff as a trustee without executive powers if that family member does not have the attributes required of a trustee; and
  • That a trust is an eminently suitable solution in these circumstances if the trust instrument is properly drafted by a fiduciary professional and a fiduciary professional(s) is appointed as trustee(s);
  • That the court should itself be the founder and source of the trust as envisaged in the definition of “trust instrument” in section 1 of the Trust Property Control Act, 57 of 1988. In other words the trust should be a “court order trust” and not an inter vivos trust based on an agreement between a founder and trustees.

Judgement was reserved and is expected early in the first term of 2022.

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